Exhibit 4.02


 


CUSIP NO. 5252M0GU5


ISIN NO. US5252M0GU59


 


	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT: $433,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS
HOLDINGS INC.


 


MEDIUM-TERM NOTE,
SERIES I


 


CONDITIONAL RANGE NOTE

DUE AUGUST 5, 2010


 


THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.


 


UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS GLOBAL SECURITY MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.


 





















 


LEHMAN BROTHERS HOLDINGS INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the “Company,” which term includes any successor corporation under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to CEDE & Co., or registered assigns, on the Maturity
Date, an amount equal to the principal amount of the Notes plus the Interest
Amount.


 


The “Issue Date” is August 5, 2008.


 


The “Maturity Date” is August 5,
2010, or if such day is not a Business Day, on the next following Business Day.


 


The “Interest Amount” is a single U.S. dollar
amount on each Interest Payment Date which is equal to the principal amount of
each note multiplied by:


 


(A)        10.00%, if, during the relevant Observation Period,
the Daily Observed Gold Price has traded strictly within the Reference Range
during such Observation Period; or


 


(B)         0.00%, if, during the
relevant Observation Period, the Daily Observed Gold Price trades outside the
Reference Range (or on either the Range Lower Boundary or the Range Upper
Boundary) during such Observation Period.


 


The “Interest Payment Dates”
are quarterly on the 5th day of each February, May, August and November,
commencing on November 5, 2008 and ending on the Maturity Date.


 


The “Observation Period”, for each Reference Range, is the period
from and including the Start Date for such Reference Range to and including
each End Date for such Reference Range.


 


The “Reference Commodity” is
Gold.


 


The “Gold Price” is the official afternoon fixing
price, stated in U.S. dollars per fine troy ounce, as calculated and quoted by
the Relevant Market (subject to the occurrence of a Disruption Event).


 


The “Daily Observed Gold Price”, for any Valuation
Business Day within an Observation Period, is the Gold Price on such Valuation
Business Day.


 


The “Reference Ranges” are determined as follows:


 


	
  Observation

  Period

  	
   

  	
  Start

  Date

  	
   

  	
  End

  Date

  	
   

  	
  Range

  Midpoint

  (RM)

  	
   

  	
  Range

  Lower

  Boundary

  	
   

  	
  Range

  Upper

  Boundary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  July  31, 2008

  	
   

  	
  October  30, 2008

  	
   

  	
  RM1  (918.00)

  	
   

  	
  RM1-BF  (863.00)

  	
   

  	
  RM1+BF  (973.00)

  	
   

  
	
  2

  	
   

  	
  October  31, 2008

  	
   

  	
  January  30, 2009

  	
   

  	
  RM2

  	
   

  	
  RM2-BF

  	
   

  	
  RM2+BF

  	
   

  
	
  3

  	
   

  	
  January  31, 2009

  	
   

  	
  April 29,  2009

  	
   

  	
  RM3

  	
   

  	
  RM3-BF

  	
   

  	
  RM3+BF

  	
   

  



 





















 


	
  Observation

  Period

  	
   

  	
  Start

  Date

  	
   

  	
  End

  Date

  	
   

  	
  Range

  Midpoint

  (RM)

  	
   

  	
  Range

  Lower

  Boundary

  	
   

  	
  Range

  Upper

  Boundary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  April  30, 2009

  	
   

  	
  July 29,  2009

  	
   

  	
  RM4

  	
   

  	
  RM4-BF

  	
   

  	
  RM4+BF

  	
   

  
	
  5

  	
   

  	
  July  30, 2009

  	
   

  	
  October  29, 2009

  	
   

  	
  RM5

  	
   

  	
  RM5-BF

  	
   

  	
  RM5+BF

  	
   

  
	
  6

  	
   

  	
  October  30, 2009

  	
   

  	
  January  29, 2010

  	
   

  	
  RM6

  	
   

  	
  RM6-BF

  	
   

  	
  RM6+BF

  	
   

  
	
  7

  	
   

  	
  January  30, 2010

  	
   

  	
  April  29, 2010

  	
   

  	
  RM7

  	
   

  	
  RM7-BF

  	
   

  	
  RM7+BF

  	
   

  
	
  8

  	
   

  	
  April  30, 2010

  	
   

  	
  July  29, 2010

  	
   

  	
  RM8

  	
   

  	
  RM8-BF

  	
   

  	
  RM8+BF

  	
   

  



 


If any Start Date or End Date is not a Valuation
Business Day, such Start Date or End Date shall be the immediately preceding
Valuation Business Day.


 


If a Disruption Event is in effect on any scheduled
Start Date, that Start Date may be postponed.


 


The “Range Midpoint (RM)”, for any Reference Range, is
the Gold Price on the Start Date of such Observation Period.


 


The “Boundary Factor (BF)” is $55.00.


 


A “Business Day”, notwithstanding any provision in the
Indenture, is any day that is not a Saturday or Sunday and that is not a day on
which banking institutions in New York City generally are authorized or
obligated by law or executive order to be closed.


 


The “Valuation Business Day” is a day on which members
of the London Bullion Market Association (the “LBMA”) are, or in the good faith
judgment of the Calculation Agent would in the ordinary course be, quoting
prices for the buying and selling of Gold in the Relevant Market.


 


The “Relevant Market” is the market in London on which
members of the LBMA, or any successor thereto, quote prices for the buying and
selling of Gold, or if such market is no longer the principal trading market
for Gold or options or futures contracts for Gold, such other exchange or
principal trading market for Gold as determined in good faith by the
Calculation Agent which serves as the source of prices for Gold, and any
principal exchanges where options or futures contracts on Gold are traded.


 


If a Disruption Event is in effect on the Start Date for
any Observation Period with respect to the determination of any Range Midpoint,
such Start Date will be postponed to, and the Calculation Agent will determine
the applicable Range Midpoint on, the first scheduled Valuation Business Day
succeeding that Start Date on which no Disruption Event is occurring; provided
however that if a Disruption Event has occurred or is continuing on each of the
three scheduled Valuation Business Days following the applicable scheduled
Start Date, then (a) the third scheduled Valuation Business Day shall be
deemed the Start Date for such Observation Period; and (b) the Calculation
Agent will determine the Range Midpoint on such day in its 


 





















 


sole and
absolute discretion taking into account the latest available quotation for the
Daily Observed Gold Price and any other information that in good faith it deems
relevant.


 


If a Disruption Event is in effect on any day during
an Observation Period (other than with respect to the determination of any
Range Midpoint on any scheduled Start Date), to but excluding the earlier of (a) the
End Date for such Observation Period and (b) any day during such
Observation Period where the Daily Observed Gold Price trades outside the
Reference Range for the Observation Period (or on either the applicable Range
Lower Boundary or Range Upper Boundary), and for so long as such Disruption
Event is continuing, the Calculation Agent will determine the Daily Observed
Gold Price on such day in its sole and absolute discretion taking into account
the latest available quotation for the Gold Price and any other information
that in good faith it deems relevant.


 


“Disruption Event” means any of the following events, as
determined in good faith by the Calculation Agent:


 


(A)      the
suspension of or material limitation on trading in the Reference Commodity or
futures contracts or options related to the Reference Commodity, in the
Relevant Market;


 


(B)       either (i) the
failure of trading to commence, or permanent discontinuance of trading, in the
Reference Commodity or futures contracts or options related to the Reference
Commodity in the Relevant Market, or (ii) the disappearance of, or of
trading in, the Reference Commodity; or


 


(C)       the
failure of the Relevant Market to calculate or publish the official fixing
price for that day for the Reference Commodity (or the information necessary
for determining the official fixing price).


 


For the purpose of determining whether a Disruption Event
has occurred:


 


(1)       a
limitation on the hours in a trading day and/or number of days of trading will
not constitute a Disruption Event if it results from an announced change in the
regular business hours of the Relevant Market; and


 


(2)       a
suspension of or material limitation on trading on the Relevant Market will not
include any time when the Relevant Market is closed for trading under ordinary
circumstances.


 


The
“Calculation Agent” means Lehman Brothers Commodity Services Inc.


 


Except
as provided below, the Interest Amount, if any, may, at the option of the
Company, be made by check mailed to the person entitled thereto at such person’s
address as it appears on the registry books of the Company.


 


Payment
of any Interest Amount will be made in immediately available funds in
accordance with the normal procedures of the Trustee (or any duly appointed
Paying Agent).


 





















 


The
Company will pay any administrative costs imposed by banks in making payments in
immediately available funds, but any tax, assessment or governmental charge
imposed upon payments hereunder, including, without limitation, any withholding
tax, will be borne by the Holder hereof.


 


References herein to “U.S.
dollars” or “U.S.$” or “$” or “USD” are to the coin or currency of the United
States as at the time of payment is legal tender for the payment of public and
private debts.


 


REFERENCE IS HEREBY MADE
TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.


 


This Note shall not be
valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the
Indenture.


 





















 


IN WITNESS WHEREOF,
Lehman Brothers Holdings Inc. has caused this instrument to be signed by its
Chairman of the Board, its President, its Vice Chairman, its Chief Financial
Officer, one of its Vice Presidents or its Treasurer, by manual or facsimile
signature under its corporate seal, attested by its Secretary or one of its
Assistant Secretaries by manual or facsimile signature.


 


Dated:  August 5, 2008


 


	
  [SEAL]

  	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Andrew Yeung

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Cindy Buckholz

  
	
   

  	
   

  	
   

  	
  Title: Assistant Secretary

  



 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


 


This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.


 


CITIBANK, N.A.


  as Trustee


 


 


	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  



 




















 


[REVERSE
OF NOTE]


 


LEHMAN BROTHERS
HOLDINGS INC.


MEDIUM-TERM NOTES,
SERIES I


CONDITIONAL RANGE NOTE
 DUE AUGUST 5, 2010


 


Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I,
Conditional Range Note (herein called the “Notes”).  The Notes are one of an
indefinite number of series of debt securities of the Company (collectively,
the “Securities”) issued or issuable under and pursuant to an indenture dated
as of September 1, 1987, as amended and supplemented (the “Indenture”),
duly executed and delivered by the Company and Citibank, N.A., as Trustee
(herein called the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Securities.  The separate series of Securities may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions or repurchase rights (if any), may be subject to
different sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided.


 


Section 2.  Principal Amount for Indenture Purposes.  For the purpose of determining whether
Holders of the requisite amount of Notes of this series outstanding under the
Indenture have made a demand, given a notice or waiver or taken any other
action, the principal amount of this Note will be deemed to be the principal
amount of this Note then outstanding.


 


Section 3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Interest Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Interest Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
provided, without the consent of the Holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected.  It is also provided in the Indenture that,
prior to any declaration accelerating the maturity of any series of Securities,
the holders of a majority in aggregate principal amount of the Securities of
such series 


 

















 


Outstanding may on behalf
of the holders of all the Securities of such series waive any past default or
Event of Default under the Indenture with respect to such series and its consequences,
except a default in the payment of interest, if any, on the Interest Amount or
the principal amount, or premium, if any, on any of the Securities of such
series, or in the payment of any sinking fund installment or analogous
obligation with respect to Securities of such series.  Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Note and any Notes of this series which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes of this series.


 


Section 4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
Interest Amount or the principal amount on this Note at the place, at the
respective times, at the rate, and in the coin or currency herein prescribed.


 


Section 5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.


 


Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $1,000 or whole
multiples of $1,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment
of any service charge, except for any tax or other governmental charges imposed
in connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.


 


Section 7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.


 


If at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
issue, and the Trustee will 


 

















 


authenticate and deliver,
Notes of this series in definitive form in an aggregate principal amount equal
to the principal amount of this Note.


 


No service charge
shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.


 


Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the person in whose name
this Note is registered as the owner hereof for all purposes, and neither the
Company nor the Trustee nor any agent of the Company or of the Trustee shall be
affected by any notice to the contrary.


 


Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
principal amount of the Notes plus the Interest Amount, calculated as the date
of early repayment were the Maturity Date. If a bankruptcy proceeding is
commenced in respect of Lehman Brothers Holdings, the claim of the beneficial
owner of a note for the period from and including the Issue Date to but
excluding the date of early repayment will be capped at the principal amount of
the Notes plus the Interest Amount, calculated as though the date of the
commencement of the proceeding were the Maturity Date.


 


Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Interest
Amount or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any Indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law or by the enforcement of any assessment or penalty
or otherwise, all such liability being, by the acceptance hereof and as part of
the consideration for the issue hereof, expressly waived and released.


 


Section 10.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.


 


Section 11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.